Apr 16 2019

Turkey election rerun won’t hurt financial markets, Albayrak says

A decision by Turkey’s election board to rerun local elections in Istanbul will not affect financial markets, Treasury and Finance Minister Berat Albayrak said.

“I don’t believe it’ll make any difference,” Albayrak told reporters in Washington late on Monday, according to the Turkish media. “Some people are trying to create a false agenda … whatever happens with the Istanbul elections, it’s already priced into the market.”

Turkey’s election regulator is considering an appeal by the governing Justice and Development Party (AKP) to rerun the March 31 polls in Turkey’s biggest city. The vote could be rerun in two months, according to the government. The AKP says opposition politician Ekrem İmamoğlu won the election because of irregularities and ballot fraud.

Albayrak said Turkey now faced a four-year period without any further elections, meaning the government could get on with economic reforms.

The first quarter of this year was the most difficult quarter for the economy, Albayrak said. The government would end tax incentives in the second half of the year, but the economic situation will improve from the second quarter and beyond, he said.

Turkey has slashed taxes and increased financial help for indebted business and consumers after a currency crisis peaked last August. The government reported two consecutive quarter-on-quarter economic contractions in the second half of last year, meaning Turkey has entered a technical recession.

In the banking industry, the government has announced measures requiring firms to increase capital when needed and to take problem loans in the real estate and energy sectors off banks’ balance sheets.

Turkey’s seven biggest banks, which control 85 percent of the credit market, have started a process of recapitalisation and two have already completed such steps, he said.